A properly designed statistical sampling plan allows contractors to reduce effort in its cost assurance process yet maintain a high degree of confidence that unallowable costs do not end up on billings to the Government.
When statistical sampling is used, FAR requires the following:
- the sample must be unbiased
- the sample must represent the universe from which the sample is drawn
- large dollar and high risk transactions must still be separately reviewed, and
- the entire process must permit audit verification.
If you feel like you are drowning in your cost assurance processes, consider the use of statistical sampling.